Blog Layout

5 ways to hold on to more of your employees for longer

Sep 03, 2018
As a business owner, do you or your managers spend a lot of time recruiting, conducting exit interviews, and onboarding new staff?

When the ‘revolving door’ in and out of your business doesn’t stop revolving, it can impact so many parts of the business that it soon becomes a priority to address the problem.

A high staff turnover rate doesn’t just impact those doing the hiring. It is damaging for general motivation, performance and productivity; it may lead to negativity in the workplace culture; the cost of hiring eats into profits; training and development costs go through the roof; and, worst of all, the chaos that can result from a constant flow of new faces in the business flows outwards to customers – and may cause them to look elsewhere.

So what can you do about this?

Well, say you want to improve performance in the workplace. It makes sense to understand the main reasons why employees are unmotivated and underperforming.

Similarly, if we want to improve staff retention, it makes sense to examine the reasons why people leave their jobs.

In recent years Gallup polls have found the same reasons for leaving have tended to come up again and again.

While there may be some unique circumstances in your own business that contribute to the problem, focusing on the following five steps will help address the main concerns…

1. Provide strong and inspiring leadership

Poor leadership consistently tops the list of why employees leave. There seems to be a lot of truth in the saying that people don’t leave jobs — they leave their bosses.

We’ve all had the experience: you’re feeling a bit under the weather, the alarm rings, and you’re faced with a choice: struggle out of bed and make it into work against your best judgment — or stay put.

Your choice is often determined by your boss. You’re much more likely to stay in bed if you don’t give two hoots about him or her.

So, unless you’re able to position inspiring leaders at the heads of your teams, this mentality spreads across the entire organisation. Are your leaders providing the support, guidance, and mentoring that employees look for?

Do they have the emotional intelligence and people management skills to really lead people – or are they in a leadership position based purely on technical skills and experience?

It’s worth noting that it’s the perception of your employees that counts here. You may think you have great leaders in place but if people are heading out the door in droves, it could be the first place to look.

2. Pay strict attention to employee needs

Unless you have a system of gathering employee feedback, you probably don’t understand the needs of your employees. You may think you do but in reality it’s just guesswork.

An annual performance review is not going to cut it. Face-to-face meetings between leaders and employees need to be frequent, forward-looking, and based on constructive ideas for development; rather than infrequent, based on past performance, and only considering KPIs.

Unless there is an effective feedback system in place, you may never know when problems are brewing before it’s too late – and people start heading for the doors. In short, get closer to your employees.

3. Develop career paths and opportunities for growth

Unless you offer your employees a realistic opportunity of advancement, they will quickly try to find an organisation that does.

A perceived ‘dead end’ job with lack of opportunities for development is highly de-motivational and generally gets people looking around, sooner or later.

People want to grow and develop themselves — this is natural within all of us.

Once you understand your employees’ goals, it’s important as leaders to help develop people and set them on the right path to achieve these goals. In professional terms, this means some sort of career path.

It’s considered unfashionable in some quarters to stay with a company for an entire career nowadays — and it’s true that ‘job hopping’ is much easier than it used to be. But many companies seem to encourage talent drain by not providing a compelling enough reason for employees to stay.

People require direction, hope for the future, meaning in their work, recognition, opportunity, and challenge — these are all strong motivators.

4. Provide more flexibility in the work environment

People are more aware than ever about the importance of their own wellbeing.

They realise that sedentary lifestyles and stress contribute to a range of other factors in leading to poor health.

Many employees are looking for more flexible work environments that allow them to strike a better work-life balance; everyone is familiar with the available mobile technology, which means they don’t necessarily have to be in the office to be at work.

When they are in the workplace they want it to be more inspiring and conducive to a healthy lifestyle: standing desks, places to workout, and so on.

Rather than asking your employees to sacrifice personal needs to fulfil the requirements of the job, design the job around changing lifestyles that are more mobile, flexible and geared towards healthy living.

5. Focus on improving your workplace culture

Do you promote a culture of recognition, accountability, engagement, transparency, reward, positivity, and success — or do your people cast envious glances towards the competition?

In some workplace cultures, the opposite dominates: silos develop and conflict, secrecy, fear, threat, and negativity all lead to de-motivation, which in turn leads to a decline in both performance and the employee experience of actually coming to work.

Your top employees naturally gravitate towards positivity and harmony and are unlikely to hang around in an environment they perceive as toxic or harmful to their growth.

Build teams that cultivate a positive culture through connectivity, empowerment, engagement, and a sense of fun.

Final thoughts
There will always be a turnover of staff in a business. But surprisingly perhaps, money is not usually the main reason for leaving.

It’s obvious that you should be paying employees well for the work they do; and you can’t do much about employees leaving to go travelling, fulfilling a long-held ambition, starting a family or moving to the other side of the country.

However, many of the main reasons for employees leaving can be addressed at the source by every employer.

Resist the temptation to think that high staff turnover is simply a sign of the times; with the immediate and temporary nature of social media, some business owners accept poor staff retention as the ‘new norm’. They believe that people are simply ‘job hoppers’ nowadays.

However, as a leader you can take action to stop the talent drain: by focusing on the above five actions, you will start to close the gap between where you want to be and where you actually are now.

Need help with your accounting?

Find Out What We Do
14 Mar, 2024
Deciding to establish a Self-Managed Superannuation Fund (SMSF) often comes as a reaction to a specific investment opportunity or desire. It could be acquiring commercial property for your business, diving into the cryptocurrency market during a downturn, or investing in that often-discussed unlisted property fund. The motivations are varied, however, setting up an SMSF isn't solely for those nearing retirement or belonging to a particular demographic. An SMSF is a viable option for individuals at various income and investment levels. The question is: is an SMSF right for you? Five essential considerations for those contemplating an SMSF. 1. Age is just a number. Age does not determine the suitability of setting up an SMSF. Whether you're in your 30s, eager to proactively manage your retirement savings, or in your 60s, seeking control over your retirement funds, the appropriateness of an SMSF is determined by your specific needs and circumstances. What's imperative is having a well-thought-out plan tailored to your personal goals. 2. Cost & control. While an SMSF offers greater control over your retirement savings, it also incurs costs, notably the annual audit fee. These costs can significantly impact younger individuals or those with smaller superannuation balances. The Australian Securities and Investments Commission (ASIC) has indicated that an SMSF with less than $500,000 might yield lower returns, after expenses and taxes, compared to a regulated superannuation fund. However, having a strategic reason for choosing an SMSF can justify the costs, regardless of your super balance. 3. It’s a big commitment. Managing an SMSF requires dedication, and for some, it’s too much. Significant time and effort must be invested in researching and making informed investment decisions. For those in their 30s, the idea of taking active control of your super might be appealing, but it's crucial to consider whether you have the time or resources to commit. If not, exploring other avenues for engaging with your retirement planning might be more suitable. 4. Family dynamics. Including family members in your SMSF to share costs, especially audit fees, might seem advantageous. Yet, differing investment goals and retirement planning needs can introduce conflicts that could easily be avoided with a different superfund structure. Once someone is a member of an SMSF, removing them can be complicated, so it's essential to ensure that inclusion decisions align with your overall plan from the beginning. 5. Know your “why”. Establishing an SMSF shouldn't hinge on your age, marital status, or family involvement, but rather on a clear and personal "why". If you have a solid reason for starting an SMSF, it might be the right choice for you. Otherwise, sticking with your current retirement planning approach may be the best path forward. Call in the experts. Making an informed decision on whether an SMSF is the right choice for your retirement planning strategy is best made with a pro on your side. We have a network of trusted individuals we can connect you with so you can ensure a SMSF will set you up for success. To secure your future with an SMSF, contact us today .
14 Mar, 2024
As we approach retirement, the welfare of our loved ones is often a big part of planning ahead. While not everyone considers this a primary concern, for those who do, the potential for their hard-earned legacy to be squandered or misappropriated by beneficiaries is a real worry. This concern is amplified when considering beneficiaries who may be prone to overspending, are in unstable relationships, or are dealing with significant health challenges. The prospect of a family fortune vanishing into the hands of outsiders is a daunting one. Testamentary trusts could be the answer. The solution: testamentary trusts. Fortunately, there is a strategic approach to mitigating these risks, which not only preserves your estate but also offers substantial tax advantages. This strategy centers around the use of a testamentary trust — a legal mechanism that only comes into effect upon your passing, following the granting of probate. A testamentary trust is embedded within your will, with your estate bequeathed to the trust rather than to individuals. This setup provides a layer of protection against potential financial pitfalls such as bankruptcy and legal disputes arising from family law proceedings. The Role of a Lawyer A will that includes a testamentary trust is not a do-it-yourself task. It requires the expertise of a lawyer — one with experience in estate planning. The complexity of establishing a testamentary trust necessitates a detailed trust deed, which outlines the operational rules of the trust, the forms of investment it may engage in, and identifies the key players - including beneficiaries and trustees. Tax Benefits and Protections One of the hallmark advantages of a testamentary trust is its tax efficiency, particularly concerning the distribution of income to minors. Children under 18 who are beneficiaries of a testamentary trust are taxed at adult rates, allowing for a significant income distribution before tax liabilities arise. This can be particularly beneficial for funding education or other expenses tax-free. The key takeaway. In essence, testamentary trusts are a great solution for those concerned about the future stewardship of their estate. By incorporating a testamentary trust into your will, with the guidance of a skilled lawyer, you can provide a safeguard for your assets against unforeseen financial risks. This strategic approach not only protects your legacy but also affords significant tax advantages, ensuring that your descendants can benefit fully from your life's work. If you’d like support in this area, please don't hesitate to contact us today .
14 Mar, 2024
Thinking of selling? You probably know the typical scene involves properties being listed, advertised, and showcased through open houses. However, a different, quieter path exists for homeowners and buyers alike, offering exclusivity and a smoother journey from listing to purchase. This is the off-market sale, a unique approach where properties are sold without public listings, broad advertising, or the traditional open house fanfare. Understanding off-market sales. The essence of an off-market sale lies in its discretion and exclusivity. According to Damian Collins, Managing Director of Momentum Wealth, the fundamental difference in off-market is the absence of public marketing. This private nature makes off-market deals more exclusive and potentially less stressful, as the selling and buying process is not exposed to the broad public. However, Collins also notes that buyers must understand market values and remember that the asking price in off-market deals is not publicly tested. In other words, don’t automatically categorise an off-market property as a bargain… Why choose the off-market route? Cath Hart, CEO of REIWA, points out that privacy concerns, avoiding the hassle of preparing for home opens, and the luxury of waiting for the right offer are among the top reasons people opt for off-market sales. Sellers might not want the public to know they are selling or wish to test the market discreetly to see where buyers see value without the pressure of a formal listing. Pros and cons for buyers and sellers. Off-market sales have advantages and disadvantages for both parties. For buyers, a key benefit is accessing exclusive opportunities that aren't available through conventional channels, along with a more personalised and flexible negotiation process. This can lead to more favourable terms for the buyer. However, the lack of advertising means potential buyers may be unaware of the property's availability, reducing the competition but also the visibility. For sellers, a key “win” is the lack of hassle regarding marketing and advertising efforts. This makes listing generally more affordable. However, this also means the property’s visibility is far lower, and the home may not sell as fast as a result. The importance of trust and due diligence. Off-market transactions call for a high level of trust between the buyer and seller. Collins warns that the negotiation process might lack the transparency of advertised sales, emphasising the importance of due diligence and professional expertise to avoid overpaying for a property. Going off-market? Let us help with the tax stuff. For those looking to buy or sell outside the public eye, understanding the nuances of off-market transactions is key to navigating this less-travelled road successfully. For example, do you know what your tax obligations are here? At Ascent Property Co, we'll help you make the most out of off-market real estate deals and give sound advice around the tax implications. Contact us today .
14 Mar, 2024
Selling a rental property in Australia can have significant tax implications, particularly concerning Capital Gains Tax (CGT). Understanding your CGT obligations is crucial for property investors to navigate the financial outcomes of such transactions. This guide delves into the essentials of CGT on rental property sales, providing clarity and guidance to property owners. Understanding Capital Gains Tax (CGT). CGT is a tax on the profit (capital gain) you make from selling or disposing of an asset, such as real estate, which has increased in value. The key to CGT is determining whether you've made a capital gain or loss upon the sale of your rental property, which largely depends on when the property was acquired. Properties Acquired Before 20 September 1985 If you purchased your rental property before 20 September 1985, you're in luck. Such properties are exempt from CGT, reflecting the tax's introduction date. However, this exemption comes with a caveat. Any major capital improvements made to the property after 19 September 1985 may be subject to CGT if they meet specific criteria, such as constituting more than 5% of the sale proceeds or exceeding the improvement threshold. These improvements are considered separate CGT assets, and their cost base is compared to the attributable sale proceeds to calculate the capital gain or loss. Properties Acquired On or After 20 September 1985 For properties purchased on or after this date, the scenario changes. You may incur a capital gain or loss when you dispose of the property. The difference between the sale price (capital proceeds) and the cost base (essentially, what you've invested in the property) determines whether you've made a gain or loss. A sale price higher than the cost base results in a capital gain, while a sale price lower than the reduced cost base may lead to a capital loss. Calculating the Cost Base. The cost base of a property includes various elements. It's important to note that certain deductions and adjustments apply, especially concerning depreciable assets and capital works deductions, which can affect the cost base and, subsequently, the CGT calculation. Purchase Cost: The total money or property value given to acquire the asset. Incidental Costs: Expenses related to acquiring, selling, or disposing of the asset, such as stamp duty and legal fees. Ownership Costs: Ongoing costs like insurance, rates, and land taxes. However, for CGT purposes, the reduced cost base substitutes ownership costs with the balancing adjustment amount related to depreciable assets. Improvement Costs: Costs incurred to enhance or preserve the property's value or to install or relocate assets. Title Defense Costs: Legal fees spent defending your property's ownership, except when they've been claimed or are claimable as tax deductions. Exclusions for Certain Costs Certain costs associated with your property cannot be included in your CGT calculations if: For All Properties: You have already claimed, or are eligible to claim, a tax deduction for these costs in any tax year. This eligibility remains as long as the option to amend the relevant income tax assessment has not expired. For Properties Acquired Before 21 August 1991: In addition to the general exclusion criteria, costs associated with assets acquired before 21 August 1991 are specifically excluded, reflecting historical tax legislation nuances. For Properties Acquired After 31 May 1997: Costs are excluded if you have claimed, or can claim, a tax deduction for them in any income year. This is particularly pertinent to assets acquired post-31 May 1997, aligning with specific tax rulings introduced at that time. Calculating the Reduced Cost Base Incorporate All Cost Base Elements With Modifications. Include all original cost base elements but replace the third element (costs of owning the CGT asset) with the balancing adjustment amount. This adjustment is typically related to the sale of depreciable assets within the property, providing a more accurate reflection of your investment's cost. Exclude Indexation. Avoid applying indexation to the reduced cost base elements. This simplification ensures a straightforward calculation by maintaining current dollar values without adjusting for inflation over time. Accounting for Capital Works Deductions If your property was acquired after 13 May 1997, capital works deductions play a significant role in your CGT calculation. Deduct any capital works deductions you have claimed or are entitled to claim. This adjustment is necessary whether you've already claimed these deductions in any income year or if the option to claim them remains open due to an unexpired amendment period for your tax assessment. Managing Depreciating Assets Depreciating assets within your property are treated distinctly from the property itself for CGT purposes. When calculating your capital gain or loss, you must exclude the value of depreciating assets at both the time of purchase and sale from the property's cost base and capital proceeds. Planning for CTG with Ascent Accountants. Effective planning and understanding of CGT can significantly impact your financial outcomes when selling a rental property. Awareness of how to calculate your capital gain or loss, considering all relevant costs and improvements, is essential. Additionally, being familiar with tax legislation and seeking professional advice will help maximise your investment's potential, while minimising its tax liability. You deserve peace of mind when it comes to selling your property. To talk about this, contact us today .
14 Feb, 2024
As a business owner, understanding and staying on top of your ATO requirements is crucial. This involves lodging forms, reporting to the ATO, and making ATO payments — but it doesn't have to be a daunting task. At Ascent Accountants, we're here to make navigating the tax landscape as seamless as possible.
14 Feb, 2024
We're thrilled to announce some major upgrades rolling out from 13 November 2023 that will strengthen the way we interact with clients and the ATO. This change is all about strengthening security in the ever-evolving digital landscape (staying one step ahead of nefarious activities is non-negotiable!). See what impact it has for you and your business.
More Posts
Share by: